Bitcoin (BTC) starts the second week of December above $90,000 as “Santa rally” talk begins.
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BTC price action focuses on a key resistance area in the low $90,000 region, but traders still see another dip coming.
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Federal interest-rate decision week hangs over risk assets despite broad consensus that a cut will result.
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The Fed decision will decide the fate of a Santa rally for stocks, analysis agrees.
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For Bitcoin, seasonality suggests that this year’s “bear market” bottom timing could echo 2022.
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Open interest and leverage stay muted in what could be light at the end of the tunnel for the bulls.
Fibonacci level becomes key BTC price floor
Bitcoin price volatility made a comeback into the weekly close — a pattern seen increasingly often this quarter.
After dipping to near $87,000, BTC/USD managed a weekly close around the $90,000 mark before further erratic moves on lower time frames, data from Cointelegraph Markets Pro and TradingView confirms.
Traders thus stayed wary of fakeout moves in both directions.
In his latest X thread on BTC, trader CrypNuevo eyed the 50-day exponential moving average (EMA) as a potential retest target.
“For shorts, I’m looking for a 1D50EMA retest and I’m thinking that it’ll adjust around $95.5k and be the range highs,” he forecast.
CrypNuevo said that Bitcoin lacked a “clear base” for going long, with the low $80,000 zone still on the table.
“Some liquidations in both directions but slightly more to the upside in the zone between $94.5k-$95.3k. If price gets there first, I’ll be looking for short signals to a potential low $80’s retest,” he added alongside charts of exchange order-book liquidity data.
Crypto trader, analyst and entrepreneur Michaël van de Poppe was more hopeful, referring to “intense” pressure among Bitcoin buyers at local lows.
“Given that there’s such an intense buying pressure taking place, I would assume we’ll be breaking upwards and holding above $92K in the coming days,” he told X followers Monday.
“That would result in a rally towards $100K pre-2026.”
To the downside, trader Daan Crypto Trades used Fibonacci retracement levels to flag bulls’ line in the sand. This stands at $84,000, a level that saw a retest to start December.
“Still holding on to that .382 area from the entire bull market so far,” he wrote in accompanying analysis.
“I think this is a key area for the bulls to defend. It’s also pretty much the last major support before testing the April lows again, which would break this high timeframe market structure.”
FOMC week sees Fed caught short on labor market
Little by way of US macroeconomic data releases this week means that the focus is purely on the Federal Reserve.
On Wednesday, the Federal Open Market Committee (FOMC) will meet to decide interest-rate changes, and markets are betting on a 0.25% cut.
Recent jobs data points to deterioration in the labor market — and hence more of a need to lower rates. Analysis sees the Fed pinned between a rock and a hard place as inflation remains a problem that would be exacerbated by a cut.
“Nonfarm payrolls have now posted 5 declines over the last 7 months, the worst streak in at least 5 years,” trading resource The Kobeissi Letter wrote in part of a weekend X post on US employment data.
“Deterioration of the job market is accelerating.”
Analytics resource Mosaic Asset Company struck a more optimistic tone, seeing an ideal combination of tailwinds for risk assets.
“With inflation above target, the economy holding up fine, and the S&P 500 near all-time highs, the Fed looks set to cut rates for a third consecutive meeting,” it summarized in the latest edition of its regular newsletter, “The Market Mosaic.”
Mosaic added that it “can’t imagine more bullish conditions to help drive the stock market than rate cuts into loose financial conditions with the economy showing signs of continued growth which supports the earnings outlook.”
On FOMC day, meanwhile, markets will watch Fed Chair Jerome Powell for signals over future policy trajectory as he delivers a speech and takes press questions after the rate announcement.
This weekend, Kobeissi described Powell’s dismissal of “stagflation” risks at the May 2024 FOMC press conference as “the day the Fed lost control.”
May 4th, 2024: The day the Fed lost control.
Fed Chair Powell responds to concerns about stagflation, “I don’t see the stag or the flation.”
18 months later, inflation is still at 3%+ and the labor market is at its weakest…
cointelegraph.com